PMI figures, 40% cuts and a double dip?

I don't want to be a prophet of doom, but having featured this gloomy Spend Matters piece the other day, the latest Markit / CIPS PMI figures released today are not good news.

I do wonder as well whether the 40% cuts request from Treasury to government departments are a good tactic?  It is clearly the old softening up, shifting expectation negotiation strategy ("I won't pay more than £100 per machine for a laptop"), and civil servants probably know that, but might it have a wider and negative effect on public and business confidence?  And if your redundancy pay is going to be less than you thought as well...not much temptation to go out and 'spend spend spend' for public sector workers!

The recruitment section in the Sunday Times was virtually non-existent this week, although my friends in recruitment tell me that the private sector has picked up over the last few months  - so maybe that reflects a move to web-based advertising more than anything else.  But if you are a construction, consulting, or marketing firm, and the public sector is important for you, then I doubt that you're feeling too optimistic.  Indeed, I hear that some of the big consulting firms have 'loaned' staff to Cabinet Office free of charge (we might come back and discuss the implications of that at more length at some stage), but even a McKinsey or Bain can only work for nothing for so long!

So this may all bode ill for the economy.  On the other hand...couldn't get a booking at the West End restaurant I wanted tomorrow....

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